A major step forward has been taken in the ₹746 crore money laundering investigation, with charges formally framed against Kritika Dahal, director of International Rising Limited, a Hong Kong-based company. The Special Court under the Prevention of Money Laundering Act (PMLA), 2002, in Mumbai has charged Dahal with multiple offenses, including criminal conspiracy, breach of trust, and cheating under the Indian Penal Code (IPC) as well as violations under the PMLA. The Enforcement Directorate (ED) has been investigating this large-scale laundering case since 2016, alleging that Dahal and her associates laundered massive amounts of money through fraudulent business activities involving overvalued diamond exports.
Background of the Case
The case stems from an FIR registered at the N.M. Joshi Marg Police Station, Mumbai, on December 28, 2016, implicating Dahal and her co-conspirators in a conspiracy to launder over ₹746 crores. The Enforcement Directorate soon launched an investigation, treating the FIR as a predicate offense under the PMLA. According to the ED, Dahal, acting in concert with Ritesh Jain, established International Rising Limited to serve as a front for laundering money through inflated exports of diamonds.
Dahal was the director and majority shareholder of International Rising Limited, holding 99.99% of the company’s shares. Investigators claim that her company carried out only one type of business: the export of diamonds to Rajeshwar Exports Pvt. Ltd. However, these exports were allegedly overvalued, creating the perfect cover for laundering large sums of money. The funds generated through these overvalued exports were subsequently routed through various bank accounts, both domestically and internationally, to obscure the origins of the illegal funds.
Charges Framed
On October 4, 2024, the Additional Sessions Judge A.C. Daga, presiding over the Special Court under the PMLA, formally charged Kritika Dahal. She stands accused under sections 406 (criminal breach of trust), 420 (cheating), and 120-B (criminal conspiracy) of the IPC, as well as sections 3 and 4 of the Prevention of Money Laundering Act. These charges relate to her alleged involvement in orchestrating fraudulent exports and laundering the proceeds of crime.
According to the court, Dahal played a key role in fabricating fake export invoices, inflating the value of diamond consignments, and channeling the illicit proceeds through various financial institutions. Her involvement as the authorized signatory on the company’s bank accounts and her directorship in International Rising Limited put her at the center of the scheme. The total sum laundered is estimated at ₹746.42 crores, and the court will now move forward with her trial.
Evidence Presented by ED
The Enforcement Directorate’s investigation has revealed a sophisticated web of financial transactions aimed at disguising the illicit origins of the funds. Key pieces of evidence against Dahal include:
1. Fictitious Invoices: The ED uncovered numerous invoices used by International Rising Limited that falsely inflated the value of exported diamonds. These documents were instrumental in creating the appearance of legitimate transactions, while the true purpose was to launder money.
2. Bank Records: As the authorized signatory on the company’s bank accounts, Dahal managed and oversaw the movement of funds across multiple accounts. Investigators traced these transactions to uncover a clear pattern of layering, designed to conceal the illicit nature of the proceeds.
3. Involvement of Rajeshwar Exports Pvt. Ltd.: The diamonds exported from International Rising Limited were sent exclusively to Rajeshwar Exports Pvt. Ltd., raising suspicions about the legitimacy of these transactions. The ED is continuing to investigate whether this company was complicit in helping to launder the illicit funds.
The Court’s Observations
In framing the charges, Judge A.C. Daga noted that the evidence presented by the ED demonstrates a deliberate and organized effort by Dahal to launder proceeds of crime. The court remarked on the extent of the financial fraud, highlighting that the laundering scheme involved international transactions and multiple layers of financial activity. These measures were aimed at obscuring the origins of the proceeds, making it difficult to track the money trail.
The court also referenced the ongoing investigation into Rajeshwar Exports Pvt. Ltd., which appears to have played a key role in receiving the overvalued diamond consignments. With charges now framed, the focus will shift to the trial, where the ED is expected to present additional evidence, including witness testimonies and financial records.
The Role of International Rising Limited
At the center of the investigation is International Rising Limited, the Hong Kong-based company that Dahal directed. According to the ED, the company’s sole purpose was to act as a conduit for laundering money through the export of diamonds. The company’s lack of any other legitimate business activity raises serious concerns about its role in the larger laundering operation.
The ED’s investigation suggests that the company’s diamond exports were deliberately overvalued to park illicit funds, which were later funneled through a series of complex transactions. Dahal’s position as director and her control over the company’s financial operations made her a key player in orchestrating these fraudulent activities.
Implications and Next Steps
With charges formally framed, Kritika Dahal will now face trial under both the IPC and the PMLA. The Prevention of Money Laundering Act provides for strict penalties, including imprisonment of up to seven years and hefty fines, for those convicted of money laundering. In addition, the court could order the confiscation of any assets linked to the proceeds of crime, further compounding Dahal’s legal and financial troubles.
As the trial proceeds, the Enforcement Directorate will continue to build its case against Dahal, with further investigations likely to uncover additional evidence of the money laundering scheme. The ED has been aggressively pursuing cases of over-invoicing and fraudulent exports, which are often used as tools to launder large sums of money. This case is part of a broader crackdown on financial crimes in India, with authorities working to expose and dismantle laundering networks.
Conclusion
The framing of charges against Kritika Dahal marks a critical stage in the ₹746 crore money laundering case. The Special Court’s decision to proceed with the trial reflects the seriousness of the allegations and the extensive evidence gathered by the Enforcement Directorate. As the legal proceedings move forward, the trial will likely shed further light on the complexities of the laundering operation and the individuals involved. With the possibility of severe penalties, including imprisonment and asset seizures, the outcome of this case will be closely watched by legal experts and financial regulators alike.
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